I’ve been blogging in China since 2003, in one capacity or another, and I would probably run out of fingers (and toes) counting up all the stories I’ve written about RMB revaluation and US Congress sabre-rattling.

Instead of writing the same old story with the same old opinion (i.e. RMB revaluation is a good idea, but not fast and not without coordination), I think a simple rundown of the proposed US Senate legislation is in order at this time.

New York Senator Chuck Schumer, always front and center when the cameras are on this issue comes up, called a press conference Tuesday to outline the retaliatory measures against China. I was expecting a 25% tariff on all Chinese imports or something, one measure that has been threatened for quite some time.

Instead we got this (emphasis is mine):

• The legislation proposed Tuesday would require the US Treasury Department to identify countries with “fundamentally misaligned currencies” and a second “priority action” list of such countries that pursue such imbalances as policy.
• Countries on the “priority” list would face a range of US responses, including a possible change in whether such nations get “market economy” designation for the purposes of US anti-dumping laws.
• US policy would be required to reflect currency undervaluation in dumping calculations for products made in the designated country, and forbid the US government from buying goods or services from such a country unless it is a member of the WTO Government Procurement Agreement.
• The measure would target projects in a designated country, including forbidding overseas private financing or insurance and opposing new multilateral bank financing, if the country fails to adopt “appropriate policies,” according to a summary of the legislation.
• Washington would also ask the International Monetary Fund to engage designated countries in special talks on their currency under the plan.
• The measure would also require the top US trade official to request dispute settlement consultations in the World Trade Organization with the government responsible for the currency.
• And it would call on the Department of Treasury to consult with the Federal Reserve Board and other central banks to consider remedial intervention in currency markets.

OK, the bold-faced stuff looks like bullshit language to me. The one that can go either way of course is the item there on WTO dispute settlement consultations. If USTR, and ultimately the administration, retains authority to take disputes further, then even this item is toothless.

I’m pleasantly surprised at how lacking in teeth this legislation is. Looks once again like a lot of hot air for campaign reasons. It’s certainly enough to hurt some folks and piss off Beijing to no end if it ever passed and was signed by President Obama (not gonna happen), but still, I was expecting worse.